$750M hybrid practice with major growth plans bolts LPL for Triad

Triad Advisors grabbed a practice with $750 million in client assets from LPL Financial, as the hybrid-focused independent broker-dealer aims to beat last year’s record recruiting pace.

Dan Cotton and Myles Dudley’s Pinnacle Private Wealth includes five other advisors and three support staff in its two Boston-area offices, although several advisors from their office of supervisory jurisdiction elected to remain with LPL.

Triad announced Pinnacle’s move on May 31, and the hybrid RIA’s exit from LPL marks at least the sixth such practice to leave after the No. 1 IBD unveiled changes to its policies.

Under its new IBD, Pinnacle plans to grow to $1 billion in client assets in the next year and get to $3 billion in the next four or five years, according to Cotton. He declines to state exactly how many advisors LPL retained from Pinnacle’s OSJ, though he says they did not manage a significant portion of its client assets.

The practice selected Triad after 18 months of consideration in an effort to change into “a multi-platform, open-architecture type of firm,” Cotton says.

“LPL treated us very well over the years, but we felt as if they weren’t going in that direction,” he says. “We were looking for a partner in the business, someone who could help us grow from the BD side.”

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A spokesman for LPL declined to comment on their move. The firm’s hybrid channel consists of about 420 practices with 5,200 advisors, out of its total headcount of 16,000 advisors.

Cotton and Dudley had spent nine years with LPL prior to their May 2 move, according to FINRA BrokerCheck. Cotton also had an earlier tenure with LPL from 1998 to 2002 in his 27-year financial career, while he and Dudley have also worked for Citigroup and Bank of America’s wealth management unit.

They launched the Pinnacle practice together under LPL in 2009, and the Woburn, Massachusetts-based RIA listed 13 registered representatives and $302 million in advisory AUM on its last SEC Form ADV. Pinnacle also has an office in Needham, and the firm is exploring a possible third office on the North Shore, Cotton says.

He credits Triad Chief Strategy Officer Nate Stibbs and senior leadership at Triad for being “very, very patient with us” as Pinnacle weighed its options.

While Stibbs declines to share the firm’s precise recruiting metrics following Pinnacle’s alignment with the firm, he says his team has matched its returns compared to this time last year and believes it can exceed its 2017 numbers by the end of the year. He praises Triad’s latest recruits.

“They’ve proven over the years their ability to grow both organically and non-organically through recruiting and acquisitions,” Stibbs says.

“Having a partner in Triad who is clearly supportive of a multi-custodian type of operating platform,” he continues, “was much more conducive with their objectives and much more clearly aligned with their strategy of recruiting growth.”